Matthew Buettgens

The Affordable Care Act’s Coverage Expansions Will Reduce Differences In Uninsurance Rates By Race And Ethnicity

There are large differences in US health insurance coverage by racial and ethnic groups, yet there have been no estimates to date on how implementation of the Affordable Care Act will affect the distribution of coverage by race and ethnicity. We used a microsimulation model to show that racial and ethnic differentials in coverage could be greatly reduced, potentially cutting the eight-percentage-point black-white differential in uninsurance rates by more than half and the nineteen-percentage-point Hispanic-white differential by just under one-quarter. However, blacks and Hispanics are still projected to remain more likely to be uninsured than whites. Achieving low uninsurance under the Affordable Care Act will depend on effective state policies to attain high enrollment in Medicaid and the Childrens Health Insurance Program and the new insurance exchanges. Coverage gains among Hispanics will probably depend on adoption of strategies that address language and related barriers to enrollment and retention in California and Texas, where almost half of Hispanics live. If uninsurance is reduced to the extent projected in this analysis, sizable reductions in long-standing racial and ethnic differentials in access to health care and health status are likely to follow.

Improving Coverage For Children Under Health Reform Will Require Maintaining Current Eligibility Standards For Medicaid And CHIP

When the Affordable Care Act of 2010 is fully implemented, it will extend health insurance coverage to many adult Americans who currently lack it. It is not known, however, how the health reform legislation will affect children and parents who would otherwise be uninsured. Based on our analysis, the Affordable Care Act has the potential to cut the number of uninsured children by about 40 percent, from 7.4 million to 4.2 million, and the number of uninsured parents by almost 50 percent, from 12.7 million to 6.6 million. However, the actual impact will depend on increasing the share of children and parents who are enrolled in public coverage and on other implementation outcomes. Most strikingly, if the requirement that states continue their Medicaid and Childrens Health Insurance Program (CHIP) coverage is rescinded and if Congress does not continue funding CHIP, the uninsurance rate of children could more than double, increasing from 4.2 million to 7.9-9.1 million children. In that case, the uninsurance rate among children would be higher than if the Affordable Care Act had not been adopted.

Toward Universal Coverage in Massachusetts

This paper presents several options designed to help the Commonwealth of Massachusetts move to universal health insurance coverage. The alternatives all build upon a common base that includes an expansion of the Medicaid program, income-related tax credits, a purchasing pool, and government-sponsored reinsurance. These measures in themselves would not yield universal coverage, nor would an employer mandate by itself. We show that an individual mandate, and an employer mandate combined with an individual mandate, both would yield universal coverage with a relatively small increase in government costs relative to state gross domestic product and current health spending. The cost of an employer mandate—with a “pay or play” design—is sensitive to the payroll tax rate and base, the number and kind of exemptions, and whether workers whose employers “pay” receive discounts when they purchase health insurance. The development of these alternatives and their analyses contributed to the eventual health care compromise that emerged in Massachusetts in April 2006.

Why Employers Will Continue to Provide Health Insurance: The Impact of the Affordable Care Act

The Congressional Budget Office, the Rand Corporation, and the Urban Institute have estimated that the Patient Protection and Affordable Care Act (ACA) will leave employer-sponsored coverage largely intact; in contrast, some economists and benefit consultants argue that the ACA encourages employers to drop coverage, thereby making both their workers and their firms better off (a “win-win” situation). This analysis shows that no such “win-win” situation exists and that employer-sponsored insurance will remain the primary source of coverage for most workers. Analysis of three issues—the terms of the ACA, worker characteristics, and the fundamental economics of competitive markets—supports this conclusion.

How Choices In Exchange Design For States Could Affect Insurance Premiums And Levels Of Coverage

The Affordable Care Act gives states the option to create health insurance exchanges from which individuals and small employers can purchase health insurance. States have considerable flexibility in how they design and implement these exchanges. We analyze several key design options being considered, using the Urban Institutes Health Insurance Policy Simulation Model: creating separate versus merged small-group and nongroup markets, eliminating age rating in these markets, removing the small-employer credit, and setting the maximum number of employees for firms in the small-group market at 50 versus 100 workers. Among our findings are that merging the small-group and nongroup markets would result in 1.7 million more people nationwide participating in the exchanges and, because of greater affordability of nongroup coverage, approximately 1.0 million more people being insured than if the risk pools were not merged. The various options generate relatively small differences in overall coverage and cost, although some, such as reducing age rating bands, would result in higher costs for some people while lowering costs for others. These cost effects would be most apparent among people who purchase coverage without federal subsidies. On the whole, we conclude that states can make these design choices based on local support and preferences without dramatic repercussions for overall coverage and cost outcomes.

The availability and marginal costs of dependent employer-sponsored health insurance

In this study, we examine differences by firm size in the availability of dependent coverage and the incremental cost of such coverage. We use data from the Medical Expenditure Panel Survey - Insurance Component (MEPS-IC) to show that among employees eligible for single coverage, dependent coverage was almost always available for employees in large firms (100 or more employees) but not in smaller firms, particularly those with fewer than 10 employees. In addition, when dependent coverage was available, eligible employees in smaller firms were more likely than employees in large firms to face two situations that represented the extremes of the incremental cost distribution: (1) they paid nothing for single or family coverage or (2) they paid nothing for single coverage but faced a high contribution for family coverage. These results suggest that firm size may be an important factor in policy assessments, such as analyses of the financial implications for families excluded from subsidized Marketplace coverage due to affordable offers of single coverage or of potential rollbacks to public coverage for children.